Food companies fail to address water risks in Peru

REPORT | 13 November 2018

Large-scale production of fruits and vegetables has created an acute water scarcity in Peru’s Ica valley, with detrimental impacts for local communities. Still, despite an awareness of existing challenges, companies buying such products from the region have failed to identify and act on water-related human rights risks, a new report from Swedwatch and Diakonia shows.

Water scarcity is a global threat that already affects large parts of the world’s population. In recent decades, the desert area of Ica in southern Peru has seen a dramatic decline in access to water as the production of food items such as asparagus and avocado has increased.

Agriculture consumes approximately 70 percent of the world’s freshwater, making it the principal user of freshwater supplies. This entails a responsibility among businesses operating in the sector to address water scarcity and its subsequent human rights risks. However, while many companies address water-related risks that may affect profitability, related human rights risks are often overlooked.

In a new report, Swedwatch and Diakonia present findings from an investigation on the water-related human rights risks associated with the production of agricultural goods. It focuses on the Ica valley in Peru, and analyses how these risks are addressed by seven Swedish companies buying fresh vegetables from the area. While a surge in demand for asparagus, avocado and other vegetables has boosted economic growth and created jobs, increased pressure on freshwater resources has also led to an acute water crisis for Ica’s local communities. The agriculture sector which is dominated by the production of export crops accounts for up to 90 per cent of yearly groundwater extraction while residents in some areas only have access to water for a few hours every week.

Access to water is a human right, and lack of water is associated with several human rights risks. The report To the last drop – Water and human rights impacts of the agro export industry in Ica, Peru: the responsibility of buyers shows that over usage of water in Ica has many severe implications; lack of water and poor water quality cause health problems, increased competition over water has led to violent conflicts and small-scale farmers have been forced to leave their lands due to drying wells. The report also finds that measures taken by local authorities to halt the over-exploitation of groundwater have not been effective, and that agro export companies have acted in breach of existing water regulations. However, despite knowledge of the lack of water in Ica, the Swedish companies have failed to recognize and address human rights risks and impacts, and to follow up on their suppliers’ compliance with human rights requirements.

The report also finds other forms of human rights risks associated with the large-scale production of fruits and vegetables, including labour rights violations at export farms where, according to interviewees, unfair dismissals are common and where the few existing labour unions report harassment against union members and their families.

Based on the UN Guiding Principles on Business and Human Rights (UNGPs) and the OECD-FAO Guidance on Responsible Agricultural Supply Chains, the report scrutinises the responsibility of buyers of agricultural products from Ica and the compliance with guidelines by the seven Swedish companies: retailers ICA, Axfood and Coop, wholesalers Martin&Servera and Menigo and importers Everfresh and Ewerman. It concludes that the companies’ follow-up of their suppliers’ compliance with human rights requirements is lacking and that they need to strengthen their processes for human rights due diligence. The report also recommends companies that are buyers of fruits and vegetables from the Ica valley to use their leverage to address issues in joint collaboration with business peers and other stakeholders, in order to comply with international guidelines and to apply responsible business conduct throughout the supply chain.

The report was conducted in cooperation with CODEHICA.